San Jose officers lose wage arbitration

SAN JOSE -- An arbitrator's decision made final Thursday denied San Jose police officers any pay hikes, raising the specter of even more officers fleeing the already lean force.

Despite the arbitrator's decision, which cited limits voters approved in 2010, the cops and city could still negotiate a deal for raises. City officials said that while they could not yet afford to give the cops the full 10 percent raise they demanded, they remain eager to discuss more modest pay hikes and pleaded with the officers' union to return to the bargaining table. But the union refused to do so, a stance Deputy City Manager Alex Gurza, the city's lead negotiator, found baffling.

"We simply are perplexed," Gurza said. "We certainly believe some raise is better than no raise. If it didn't meet their needs, a counterproposal would certainly be welcome. To not negotiate is very troubling. We want to negotiate pay raises for police officers."

With officers already bolting the department for higher pay elsewhere, both sides had agreed raises were in order. But the agreement stopped there. The officers insisted the city fully restore within a year or two the 10-percent pay cuts they had accepted in 2011 to limit layoffs amid huge budget shortfalls. City officials offered raises up to 9 percent over two years. But the union's leader said much of that came with "strings" they couldn't abide. Just 2.5 percent of the offer was for the current budget year. An additional 2.5 percent next year would depend on savings from retirement cuts the cops are fighting in court. An additional 4 percent next year would not count toward pensions.

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"If they gave us a very simple wage offer we'd take it to our members," said San Jose Police Officers' Association President Jim Unland. "We haven't seen an offer that looks that clean. All of their offers continue to come with attachments and strings."

Relations between the city and its officers have been strained to the breaking point as soaring costs for retirement benefits, greatly enriched over the last decade, have eaten into the city budget and spurred cuts to pay and perks. Officers and other unionized workers bitterly protested ballot measures Mayor Chuck Reed sponsored over the past two years to reduce arbitration awards and pension benefits. The police union is among several suing to block the pension measure that would either reduce or make them pay more for their retirement benefit.

But the arbitration award raised fears that an already worrisome officer exodus will become a stampede, leaving the police department dangerously short-handed.

"We're worried," Unland said. "There were a lot of officers who were on the fence and watching this decision closely. If it came in at 10 percent, they would find a way to stay. Most of these officers don't want to go. But if it came in at zero, they're going out."

Officers noted that the city's police force has shrunk from nearly 1,400 officers to fewer than 1,100, thanks to budget cuts, retirements and resignations. About 150 officers have left in the past two and a half years, while crime rates have risen throughout the region.

Unland said the officers see no point in discussing raises with the City Council out on summer recess. The council gives guidance to city negotiators and ultimately approves contracts. Unland said he doesn't believe his union can get a better deal until the council returns and perhaps tells management to drop the objectionable "strings."

Gurza disagreed and said the city is willing to have a mediator work with them to help reach an agreement. It is unclear in light of the arbitration decision, which is binding but can be superseded by a negotiated contract, whether the council could award raises to the officers without the union's agreement.

While the officers were unable to reach a deal with the city on pay, San Jose's largest union, the American Federation of State, County and Municipal Employees, reached a tentative one-year agreement that will give its workers a 2-percent raise. Those workers had not only been forced to swallow the 10-percent pay cuts to help close massive deficits a couple years ago, but also an additional 2-percent they had received in the final year of an expiring contract while others took cuts. Workers were voting on the contract this week and it would go to the council for approval next month.

Union leader Yolanda Cruz said employees were eager to begin restoring both pay and relations with city leaders.

The top annual base salary for a San Jose officer is about $98,000 a year, including a uniform allowance. But city officials say benefit costs effectively double that figure to almost $194,000, up 21 percent from four years ago. They note that the police budget has grown 9 percent while staffing has fallen 13 percent since 2009.

City retirement costs that more than tripled over a decade drove Reed to push ballot measures to curb them. Measure V in 2010 limited arbitration awards for officers and firefighters. Measure B in 2012 sought to reduce pension benefits going forward for new and current employees, and goes to a court hearing later this month. Voters approved both overwhelmingly.

Among Measure V's provisions was that an arbitrator cannot increase total employee compensation, including benefits, at a rate that exceeds average city revenue growth over the last five years. The city argued that revenue grew just 1.24 percent over the last five years, but because police pension costs rose 4 percent, no raise could be awarded in arbitration. Retired Judge John Flaherty, who was the deciding vote on the arbitration panel that included Unland and Gurza, agreed he could not award raises in arbitration, and urged a negotiated settlement.

"If this award does become final," Flaherty warned in the decision, "neither the city nor the SJPOA will have achieved their goal of providing wage increases to police officers."